Increasing your credit line is a great tool to improve your financial standing and experience life in HD.
But there are rules.
Not the kind of rules that force you to walk over coals or recite the Constitution.
Rules by which you can request limit increases at the best possible time in order to receive the best possible rewards. These are NOT the typical annoying checklist rules that feel unreachable and nonsensical.
These are the types of rules that allow you to make your move to your advantage at will.
Rules that rule. Too much?
Rule 1: timing that doesn’t suck
Do you remember watching survival shows in the early 2000s? What was the basic rule for a warm, delicious shelter? Don’t build when it’s already raining.
The same principle can be applied to funding. You may be able to negotiate an increase, but it won’t be on your terms.
Before you make your call to your credit card company, there are a few things to consider:
- Your credit utilization is below 30%
- That your credit score is hot (check your credit report!)
- Your bank account is error free and there is no derogatory information
- Income payments are made regularly
The most important thing is that your line of credit is maintained but used. This means that you will make regular purchases with your card. You make your payments on time and your payment history is clear. And you pay off your credit card balance every month.
Rule 2: The raise works for you
Sure, having a $ 100,000 line of credit is great. It’s also great to manage your payments without breaking a sweat every time the bill payment pings on your phone.
Your line of credit should give you access to the best in life. At the same time it should add value to automate your finances (more in Ramit’s book, I will teach you to be rich)and grant you access to some epic rewards.
Rule 3: You are in control
This rule is often ignored and leaves us feeling vulnerable to the core. If you’re still living in a trap (Ramit refers to this as the ordinary job of bringing yourself to a standstill so you can barely afford a cup of coffee) or the life of a treadmill (where you might be able to travel one day), It is Time to improve and realize that banks exist because we let them.
They provide a convenience, and once that convenience no longer exists, we will literally be taking our money elsewhere.
Are you thinking of calling BS? Just look at this.
You need our capital in savings to create a buffer for lending. You need to take out loans to make money on the interest charged. Got it? You need your savings and your credit. Yes, even Bank of America has advertising campaigns for new customers.
After understanding your purchasing power, requesting a credit limit increase should confidently articulate your request. Our Negotiation techniques are hard-wired for a positive result and can be used from requests to increase the credit limit to requesting an increase. Without sounding cheap.
Now to the “how”
While it’s easy enough to do an online limit increase through your online profile with the card company you choose, some companies prefer to do the final verification over the phone.
When the call comes in (and expects that call to come) it is important to remember Ramit’s basic negotiating rules.
A special tip from Ramit: Always make a note of the call and get as much information as possible. This includes names, dates, numbers.
Step 1: ask what you want
Just ask. Something as simple as “I want to raise my credit card limit” is a good place to start. However, if you want to go a step further, add, “I’d love to see a reduction in this APR.”
Step 2: possible pushback
If there is a slight setback, remind the advisor that you have been a client for X years. in the Ramit’s negotiation techniqueshe explains that it is far cheaper for a bank to retain a customer than to have a new one on board. In fact, the cost of adding new customers is anywhere from $ 350 to $ 2,500.
Step 3: Another push if necessary
If there is still a pushback or the limit is not what you want, then you need to adjust to it. Ask the advisor to review your history. Ask again how the counselor can help you. Repeat this process with a manager if referred to him or her. Remember to end strong and use phrases like “I understand”, “I want”, and “I want to”.
If you’ve stood firm, you should have what you want by the end of the call.
Why should you necessarily ask for an increase in the line of credit?
As Ramit says, “Credit has a far bigger impact on your finances than saving a few dollars a day for a cup of coffee.” But it might not be quite what you think (if what you thought was on a shopping spree and used your limit more like a destination).
Well managed credit increases your credit score
If you find yourself using your credit card past 30%, it might be a good idea to increase your credit card limit. This means you will stay within that 30% margin which will help improve your credit score. Obtain a line of credit that is convenient for you to stay within a safe margin. If you don’t, you may be using a higher percentage of your credit card, which can cause your credit score to decline. And from here it’s a downward spiral, my friend. If you want to know more, check out our article about how to check your credit score.
Higher scores lead to better offers
If you have a perfect, untouchable credit score when your credit card line goal increases, then you’ve come to the right place. Better credit scores mean better access to exclusive credit card offers. Think platinum, by invitation only, reserve, elite. Do we have to say more? If your credit card companies are operating on an annual variable rate, your credit score counts in your favor a lower APR. Not only for your credit card, but also for other credit products.
Your cash flow is in your hands
A credit card is a very short-term bridge between the purchase of an item and receipt of your income. Higher credit limits will give you that extra cash flow as long as you remember not to use it like a safety net (which is what emergency saving is for).
If you should say NO
A credit limit must serve you. The moment a higher limit causes nervous night sweats and clammy palms, it’s time to pull the plug.
- You invest. Do not use loans to fund investments
- The increase in the line of credit is prohibitive
- You are at the peak of the credit score heaven
- Another credit company is about to build your business
- You recently applied for a credit
Increasing the line of credit is about more than exceeding the limits of credit limits. It’s about implementing a strategy that will allow you to get the full potential of a credit card. A credit card should:
- Be a tool to improve your credit score
- Help meet your personal financial goals
- Create opportunities through purchasing power
Once a credit card line upgrade meets all of these criteria, you know you are well on your way to crafting a financial plan that fits your lifestyle.
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